Myeisah Petty, a seventh-grader at Stuart-Hobson Middle School in Northeast D.C., chatted with friends on the school steps after the bell rang at 3:15 p.m. Monday. She was late to school that morning, but when a new initiative debuts at her school next month that pays students for good grades, attendance and behavior, she said she will make sure to always get to class on time. But she she might not be working harder for the right reasons.

“It’s not a good way,” she said of the new program. “Some people are not doing it for the education. They’re doing it for the money.”

Capital Gains, a trial program which lets students at 14 District middle schools earn up to $100 a month, is jointly funded by Harvard University and the city and will cost about $2.7 million a year, It is one of many bold measures D.C. Public Schools Chancellor Michelle Rhee is taking to change the city’s notoriously subpar school system as she enters her second year on the job.

She has plans to tie teacher pay to performance and make it easier to fire incompetent teachers. Her proposal would raise annual salaries to more than $100,000 if teachers give up their tenure and go on probation, putting their jobs on the line for a year. If the Washington Teachers Union resists working with her, she said she is prepared to make serious reforms without their backing.

Rhee is among the loudest critics of the abysmal state of D.C. schools. “The outcomes for kids that are happening right now are robbing them of their futures,” she said in a CNN interview.

By many measures, D.C. public schools are failing. Ninety-two percent of D.C. eighth-graders are not proficient in math, and 88 percent are not proficient in reading, according to statistics by the National Assessment of Education Progress, a project of the U.S. Department of Education. More than 30 percent of students never graduate from high school or take more than four years to do so.

The District spends more than $13,000 annually on each student, trailing only New York and New Jersey in spending, according to census data. Last week, Mayor Adrian Fenty proposed a plan that would put $1.3 billion into renovating and even rebuilding D.C. schools. But just a fraction of the money will end up in the hands of D.C. teachers.

“The system is not a poor system,” said Jay Shotel, a professor in the Graduate School of Education and Human Development. “It has been poor at managing the resources it had.”

Despite widespread cynicism about the system, GW students and alumni have a strong presence in District schools – the Graduate School of Education and Human Development churns out about 50 people a year that teach in the schools and close to 200 students tutor through the D.C. Reads Program.

“They’re interested in it because they know D.C. public schools have been in a mess for a while,” said Andres Carriedo, assistant coordinator for the program. “That’s known even outside of D.C.”

In her first year, Rhee fired 36 principals and shut the doors of 23 schools, including nearby Stevens Elementary School on K Street.

Shotel said he likes Rhee’s plans to offer more incentives to teachers and fire those who are not getting results, but added that her harsh policies may scare away some good teachers.

“We have not traditionally valued good teaching or rewarded it,” he said. “It is tough teaching in urban schools.”

In an area where more than half the students qualify for free or reduced-price school lunch, many critics of Rhee’s bold policies say troubled neighborhoods and weak parenting, not the teachers, are at fault for poor test scores and low retention rates.

“If you’re coming from a bad neighborhood, your chances are slim,” said Rodney McManus, who was standing outside of Stuart-Hobson Middle School in Northeast D.C. last week, waiting to pick up his friend’s son. His own son goes to school in Maryland. “I wouldn’t dare put my son in D.C. schools,” McManus said.

Some D.C. teachers think Rhee has the right idea with her reforms, especially in high-poverty, high-crime areas.

Carol Scott, a teacher at Howard D. Woodson Senior High School in Northeast, has a daughter at Stuart-Hobson. She said her sixth-grader and her highly motivated peers will easily earn the Capital Gains cash rewards, but they are not really the ones who need the incentive.

At Howard D. Woodson, which is not a part of Capital Gains, test scores are lower and more students struggle to keep up, and the money could have really made an impact.

“For other types of kids who don’t have other motivations, it’s a good idea,” Scott said. “It’s one of the schools that needs some kind of motivation.”

After school, Judah Brooks sat on the stoop outside Stuart-Hobson and chewed on some baby carrots. The seventh-grader said he heard about Capital Gains on the radio this summer, though his teachers haven’t said a word about it. The program will motivate his peers and help them earn money for college, he said.

Brooks said, “I think it is going to be really helpful for students to get better grades.”